Discovering the adversary, one day at a time

Terrorist Financing

August 27, 2011

One of the first things UK-based jihadis did once the movement established its first tenuous foothold online (2003-2004) was to share historic videos (no doubt readily accessible to them in hard copy) through commercial file servers (Sendspace, etc) and, of course, Archive.org. Numerous videos piled onto the web between 2003-2006, featuring a host of historic figures that would test the meddle of any young student of the Salafist-jihadi movement (Sheik Tameem al-Adnani, Rifai Taha, etc).

The following video was available on Archive.org for years (but not now). It is perhaps the perfect “jihad” video. It features four primary players of the Global jihad movement sitting/standing on a dais together -- filmed in an effort to raise money for the Chechen jihad. It's 48-minutes long, in Arabic and English; it features "stars" of the movement, and includes a bit of recent history. It is a perfect example of how jihad media was used in fundraising and recruitment before 9/11, and it provides some much-needed historical continuity in the current study of the origins of the jihad media phenomenon.

The video epitomizes 90s-era Londonistan: a cultural, theological, and entrepreneurial milieu that was the heart of the global jihad movement. Some analysts say the jihad went global after 9/11. Still other believe it happened after Bin Laden’s 1998 fatwa. I believe that the “Jihad” went global once it established itself in London in the early 1990s. A group of Salafist-jihadi exiles thrived under UK's lax policies toward "dissidents," exploting both the government's disinterest and commonplace Western freedoms - religion, speech, etc. In this global stew, Londonistan became a safehaven with limitless freedom and cash. It became a proving ground for a global mindset.

As I said, the video appears to be a late-90s fundraiser for Chechen mujahideen -- probably during the second Chechen War. It's being held in what looks like a school or mosque auditorium. It features (L to R) Abu Hamza al-Masri, Omar Bakri, and Saudi dissident Mohammed al-Massari (known as the purveyor of one of the first jihadi forums: Tajdeed). Standing up at the podium (speaking in Arabic) is Abu Qatada al Filistini, one of the most popular and divisive characters among the Londonistan cadre.

As Abu Qatada describes the situation among the Chechen fighters, a film (most likely from Chechnya) is projected onto a screen behind the dais, giving us an idea of how jihad videos were used before the age of Youtube and social networking. Omar Bakri translates Qatada’s raspy Arabic. Massari looks rather bored.

Though the audio and resolution are awful, the video highlights Abu Qatada’s famous public persona, and poses an analyst's challenge to identify the individuals walking behind the panel and whose role in the community may never be fully known. At about 29:00, Qatada concludes his part, and Abu Hamza addresses the audience in English, noting the strategic advantages in maintaining the Chechen jihad for the global jihad movement (excuse my miserable transcription skills)

“...I just want to stress two points he did...our brothers there [pointing to the screen behind him] are the most experienced fighters on earth. If we lose them, if we lose any one of them, we have lost a great asset, a great potential, a great trainer, a great expert in war, a great [????] for the kafirs, a great bodyguard for Muslims, and is time, time if we are negligent, will not be in our favor. Secondly, the tactics of the mujahidin is to trap the Russians...they know that they cannot fight Russians face to face, they have to fight guerilla wars...”

Bakri speaks, briefly toward the end. At one point he mentions Bin Laden, but the audio is terrible, and I'm not sure what he's saying. However, my guess is that he's mentioning the then-recent Africa embassy bombings.

There you go. A little bit of recent history, with some provocative statements by Londonistan’s professional provocateurs. Much has changed in London since the 1990s, but that history hasn’t been written yet, and we’d be short-sighted if we thought we knew everything that needed to be known.

December 21, 2009

It's back! Around the Web has returned (I know you've missed it). After thinking about it for some time, I admit that it's still the best way for me to keep up with the daily fire hose of information. And after a day of cooking (chicken chili soup anyone?), I’m ready to pick through the web for a little counter-terrorism fun.

Let's begin then...

One of the more intriguing recently thwarted plots comes to us from Bosnia .

New jihadi blog. New to me, anyway: http://madkhalis.com/

Hey, check out Aaron, all grown up and writing for Studies in Conflict and Terrorism: "Comparison of Visual Motifs in Jihadi and Cholo Videos on YouTube," Volume 32, Issue 12 December 2009 , pages 1066 – 1074

What this suggests to me is that we need to be able to speak / read not only spoken or written languages of our sources, suspects, informants and opponents — but also the language or underlying logic of their thought.

Charles, I call this “thinking with the adversary.” It’s a modification of an old Catholic theological principle.

I know this is old in blog-time, but I can’t resist writing this sentence: It was never 2000, and it’s not 50 now, and it was never 30 and it’s not 200 now. The numbers have always been in the 5 or 10s. Bradford’s law extends even to jihobbyists.

April 05, 2009

I know, I know. I've been remiss in my duties to post an Around the Web, and now I've been writing one for what feels like a week. It's going to take you about a week to get through it, too, but I don't want to hear any whining. It's a slow week in most offices. If you can catch up on your fantasy baseball picks, you can read this post.

We start with Jihadica, and the squibs from hell: Thomas surveys recent jihadi publications. They also have a roundup of their recent Workshop in Oslo (Part I and Part II). Excellent work all around.

Three of them, who lived in Naples, are though to be Islamist radicals sympathetic to the radical 'Takfiri' ideology...The three radicals had already been involved in falsifying documents to aid jihadist groups.

Meanwhile the Financial Times throws some cold water on all this talk of Islamic finance saving the world. [This talk concerns me, because the vast majority of people who know known nothing about Islamic finance.] (via Aqoul)

And the Times of London is reporting on something that happened, what? Two weeks ago?

Holy Spicolli! Abu Muqawama is an actual...guy. I thought he was just a blog.

In Stage One, the agency (in this case the FBI) embraces radical Islamist front groups. In Stage Two reality sets in and said agency withdraws their cooperation with groups, once understood that they share the same goals as AQ. In Stage Three these "moderate" groups start making bizarre accusations hoping to test and intimidate said agency. In Stage Four said agency will apologize for something it's not doing and cave to all demands.

So where does the money go? This recent Reuters list of "Gulf Arab foreign investments" gives you some idea. (via The Arabist)

I welcome to the club of "blogs she reads":

Shariah Finance Watch

http://www.shariahfinancewatch.org/blog/

And a jihadi blog (via The Pest)

http://millatibraheem.wordpress.com/

Flash: there are Salafi groups in the Levant, according to MEMRI there's a new Salafist-Jihadist one in Gaza, and two S-Js reported killed in Gaza.

Speaking of Africa: The Pest of all people pointed out the novel qualities of a current release from AQ's Somalia branch. It's an all-English video, featuring an American muj, rapping, or something. More at Jawa Report, Danger Room, and others including here and here.

The Pest's post is here: http://revolution.thabaat.net/?p=1096

You can find it here: http://www.archive.org/details/kmen-bradle

The video does suggest that there is an audience for this jihadi vileness in the US, and belies the commonly acknowledged trope that "our" Muslims (ie, the US) are not as radical as "their" Muslims (ie. Europe). Perhaps, but then, how do we know?

Over in Yemen, Waq-al-Waq notes a recent article in AQ's periodical Sada al-Malahim that provides some "good background" on KSA's 85 Most Wanted.

And MEMRIBlog reports that Yemeni officials have their own Most Wanted list

What about the analog version of the group? Al Qaeda Today: a Policy Forum luncheon hosted by The Washington Institute's Stein Program on Counterterrorism and Intelligence. (PolicyWatch #1477: Special Forum Report)

Drew has a post on a recent study that challenges the work of Robert Pape: Decision Processes of a Suicide Bomber

Question to the audience: How many suicidebombings in a row before it's called an offensive?It must be Spring.

[Note: there's little of the "black flag" jihadi media here. Rather, you'll find a lot of dawah, some of it mainstream (even hippie dippie), much of it of the Salafist current and some of straight out of Salafi-Jihadist current]

December 08, 2008

It seems unlikely that this 3-D animation was prepared solely for the purpose of a propaganda video. More likely it was created for training purposes, and then re-used after the fact by as-Sahab.

Intelfusion had a wonderful post last week pointing out a recent spat of cyber attacks between Pakistan and India. Of course, what's interesting to me is the fact that the targeted websites are energy-related but there is plenty of grist for numerous mills here.

In this strike, he said, students would not attend school and workers would not go to work. Al-Zawahiri also called upon the ‘ulama of Al-Azhar to be independent again and to lead the ummah against the “Zionist-Crusader campaign.”

Not ready yet. I've been remiss in linking to this article by Khalil al-Anani on the real challenges faced by violent Islamist groups that are seeking a "moderate" middle way:

The question of the possibility of assimilating Gamaa Islamiya aside, which is ultimately a government decision, there remain serious impediments to the movement's ability to work effectively within the Egyptian system. Foremost among these is its religious and political rhetoric. Although it has indeed placed its bitter legacy of violence behind it with its renunciation of recourse to force and its retraction of its sweeping condemnations of heresy, its religious discourse remains little different to conventional Salafi (ultra- fundamentalist) rhetoric, especially as pertains to rules of conduct, penal jurisprudence and jihad, with regard to which it derives most of its concepts and principles from ancient theological and juristic texts.

In OSINT news: Interested in org theory? Try this list of magazines for "org-heads"

Over the past few weeks, Hamas's international financial support network suffered a series of setbacks, most notably the U.S. federal court conviction of the Holy Land Foundation for Relief and Development (HLF) and five of its leaders on charges of providing material support to Hamas.

A land grab? It's an interesting question, considering the complex shariah associated with these issues. Alas, the article ends on a note of delusion:

There is a hope too that if Muslims are allowed to become part of the urban landscape rather than hidden away there will be less risk of furtive fundamentalism.

November 24, 2008

The men, Shukri Abu-Baker, Ghassan Elashi, Mohamed El-Mezain, Mufid Abdulqader and Abdelrahman Odeh, could face up to 20 years in prison for their convictions on conspiracy counts, including conspiring to provide material support to terrorists. The verdicts, read Monday afternoon, ended a two-year saga in what is considered the largest terror financing case since the 9/11 attacks.

In the original trial last year, jurors acquitted El-Mezain on 31 of the 32 counts against him, but could not reach unanimous verdicts on any other counts, prompting a mistrial.

Prosecutors made a series of significant adjustments, from dropping 29 counts each against defendants Mufid Abdulqader and Abdelrahman Odeh, to adding new witnesses who could put the charity support in context. In addition, jurors in this trial saw three exhibits Israeli military officials seized from the Palestinian Authority which showed the PA also considered HLF to be a Hamas financer and that an HLF-supported charity committee was controlled by Hamas.

The result was a much more streamlined case that followed a logical narrative, said Peter Margulies, a law professor at Roger Williams University in Rhode Island. Seeing the Palestinian Authority reach the same conclusion as the U.S. government had to have helped, he said.

In addition, prosecutors provided summary exhibits that served as "a road map" to the case and had to help jurors deliberate, Margulies said. "The jury was able to look at the evidence and get past the perceived biases of any of the witnesses and see the evidence as a whole."

That evidence made clear that the defendants knew where the money raised in the U.S. was going despite legal prohibitions against support for Hamas.

The significance of this case cannot be overstated. In the brief time in 2003 I spent as an FBI analyst almost a third of the cases that passed over my desk were connected in some way to Holy Land. I suspect that at least some of those cases will finally result in the much deserved arrests and trials now that there's a whole flock of jail birds who may sing for commuted sentences.

Let's pray that government prosecutors have learned rich lessons from this second prosecution of the Holy Land players, and that they will move forward with these very difficult and complicated cases of money laundering and that oh-so-subtle jihad that seeks the day when the sun of Islam rises from the West.

I raise a glass of French bubbly to the men and women -- the special agents, lawyers, and to those unsung heroes of the GWOT, the FBI analysts -- who dedicated long miserable hours to bring these scumbags to justice. Thank you!

October 20, 2008

No
political group has more respect on the streets of predominantly Sunni
countries like Egypt than Hizbollah. In a 2008 Zogby Arab Public
Opinion poll, 27 per cent of Arabs chose Hassan Nasrallah as their
ideal leader – putting him in first place...Contrary to prevailing
perceptions in the West, the Arabic media draws a sharp distinction
between “resistance” and “terrorism”, with marked impact on the
reputations of Hizbollah and al Qa’eda....Al Qa’eda, by contrast, are
invariably dismissed as mere terrorists.

Will at Jihadica asks an important question about recruitment: "Are there examples of people who were motivated solely through the Internet and found associates and opportunities solely through the Internet?"

I have a short answer, and a shorter answer. Latter first: No. Former: Because AQ's primary method of recruitment cannot be done effectively online alone. There must be one-on-one contact. If you're interested in a longer analysis of this phenomenon, pay me.

Primary Source of note: "How to Kill a Crusader in the Arabian Peninsula" by Amer Al-Najd.

“Below I will explain the jihadist way of action and the security measures to be employed by the jihad fighter [when he wants to kill a Westerner]:

“First of all, before carrying out the operation, pray [to Allah] to guide you on the good path.

“[Regarding your] external appearance - Try as much as possible to look like someone who is not religious. For example, wear [a kuffiyeh] with an ‘aqal instead of a turban, and wear cheap dark glasses during the day and regular glasses at night. Your clothes must be long, and try if at all possible for them to be heel-length, or longer; don’t be afraid of this. Wear a sport suit or a regular suit. Similarly, it is greatly preferable to be shaven..."

After being over-hyped in the 1990s, cyberwarfare and cyberterrorism are finally coming of age. Curiously, none of the recent examples of it including the downing of the AQ forums to the Sunni-Shiite media hackings (reported in yesterday's Washington Post) to the recent Russian attacks against Estonia and Georgia (being studied through Operation Gray Goose) are US-based or US-generated. It's borderless warfare.

Meanwhile, a new report on emerging cyber threats appears at first glance to be mired in a law enforcement model that should have been discarded after Russia's attack on Estonia. I wish we were sophisticated enough to make distinctions between different types of online activity, rather than just lumping it all together. Threats to VoIP and state-directed DDOS attacks on key national infrastructure nodes are both important, but are fundamentally different threats. However, the technological sophistication of our policy-makers is hindering our ability to get over the whole "wowy-Internet" thing and move on to a mature understanding of the cyber world.

Matt Armstrong at MountainRunner has an excellent post on our limited capabilities in the "Second War of Ideas:"

The U.S. is still not armed for the Second War of Ideas, a war we’re already 7-10 years into. To be effective, we need a Department of Non-State, functionally if not bureaucratically, armed with the appropriate tools and comprehensive collaboration across agencies and countries and organizations. But we also need a Department of State as traditional diplomacy is not obsolete.

AP reported last week that -- surprise! AQ still has plenty of cash. As I've saidbefore, with trillions of dollars in surplus cash flowing out of the Gulf even .00001 percent of it directed toward AQ means a lot of jihad.

October 06, 2008

From the Government Accountability Office comes the "Nah, really?" moment of the day.

Drum roll. Sit down while you read this.

Limited information is publicly available from official government sources for some [Sovereign Wealth Funds]. While some have existed for decades, 28 of the 48 SWFs that GAO identified have been created since 2000, primarily in countries whose foreign exchange reserves are growing through oil revenues or trade export surpluses. GAO analysis showed that about 60 percent of these 48 SWFs publicly disclosed information about the size of their assets since the beginning of 2007, but only about 4 funds published detailed information about all their investments--and some countries specifically prohibit any disclosure of their SWF activities.

September 28, 2008

You may be unaware of the situation in the Gulf of Aden, so let me fill you in: it's chaos. Somali pirates -- some no doubt affiliated with al-Qaida's HOA affiliate, Mujahideen Youth Movement (MYM)-- are in control of the waters off the coast of Africa between the Horn and Yemen.

It's not jihad related, not yet anyway. The pirates are undertaking kidnapping and ransom schemes, cargo theft, etc, in an effort to pull in cash. The problem is, they're wildly successful. I suspect that at least some of that cash soon will be financing al-Qaida's efforts in the HOA. If AQ hasn't already establish training camps and dawah networks within Somalia, they will be if the money continues to flow in.

EagleSpeak has been doing an excellent job covering the now-daily reports of cargo-seizures, hostage-takings, K&R transactions, etc, including news of the Iranian "mystery ship." So is Galrahn at Information Dissemination. OSINT is coming from many corners, with news of French commandos rescuing tourists, pirates seizing Russian tanks bound for Kenya (the MV Faina), and more stories emerging almost every day.

The Russians are sending a frigate to the region. According to Eagle1, the Malaysians are sending ships. The French, Italians, and Spanish have all expressed interest in sending more ships, planes, etc. However, the situation has been deteriorating for quite some time. Last week the US Navy suggested that merchant ships hire security services, much to Galrahn's chagrin:

I also find it very frustrating that last Thursday the Admirals stood in front of the American people in Durham and discussed in detail the role of naval power to protect the global system to insure the free flow of trade, and here we have a clear example of trade disruption on the seas and the US Navy basically tells ship owners they can't solve the problem.

The problem with this "it ain't our problem" approach is that eventually it will be our problem. Flush with cash, al Qaida will strike the region again. From a well-funded base in Somalia, it can project its power onto the Arabian Peninsula with ease. I suspect that we're woefully unprepared to respond to any looming threat in Somalia. What are our intel assets like? Do we have any MYM insiders on the payroll? I hope so.

AQ's next major plot targeting Gulf energy infrastructure may originate in the Horn, and we may never see it coming.

AbstractWhile much is made of the risks associated with money laundering, little in-depth work has been undertaken to understand the true extent of the problem. Money laundering is difficult to measure. However, there is the implicit assumption among the regulatory authorities that amounts involved are huge; posing a significant threat to the integrity of the financial system and the reputation of domestic financial institutions. This paper draws attention to problems that the author believes arise from the current focus of money laundering legislation on financial sector compliance, by examining the validity of "second best" indicators of effectiveness. A preliminary attempt is also made to evaluate the association between money laundering and reputation looking for evidence of a "virtuous circle of compliance". It draws from a pilot questionnaire and interviews carried out with financial institutions as well as from statistical data made available to the author by the U.K. Home Office.

May 21, 2008

Daveed Gartenstein-Ross’s new policy brief for the Foundation for Defense of Democracies summarizes some of the strategic consequences of our current dependence on foreign oil. His arguments aren't new, they have just taken on new resonance as the price of gasoline has put oil on everyone's brain these days. The argument against further dependence on foreign oil are in summary that,

I mostly agree with him, but the purpose of this post is to point out that the arguments and solutions that Gartenstein-Ross offer are more complex than at first glance. A closer look at two of the common arguments in the FDD report will, I hope, be an informal introduction to a very complex dynamic at work. This post doesn't represent a formal analytical piece, rather it is a synthesis of a few ideas rattling around in my head after reading the FDD brief.

You won’t find me disagreeing with Gartenstein-Ross’ first argument that our dependence on foreign oil causes us to “fund both sides of the terror war.” Money pouring into Persian Gulf countries is finding its way into the hands of terrorist groups, and more important, global radicalization efforts operating under the false cover of “dawah.” The rise of Islamic banking -- and the impenetrable, exclusive culture of Islamic scholars who run it -- poses its own threat, one that we are woefully unprepared to handle. I dedicate a great deal of content on this blog to awareness of the petrodollar power emerging from the Gulf. It’s one of the reason why I believe that regardless of Al Qaeda’s losses in Iraq, time is on their side. The GCC recently reported that member countries were expecting a 12 trillion dollar cash surplus over the next five years. Even if a mere.001 percent of that cash reaches Al Qaeda, that’s 12 billion dollars. That’s a lot of jihad.

Please read my new article in the Combating Terrorism Center’s Sentinel journal for my opinion on Al Qaeda’s threat to energy infrastructure in the Gulf. Gartenstein-Ross and I agree on this count, as well.

The core problem here isn’t that we’re sending our money into the Gulf. It’s that Gulf beneficiaries are using their new-found wealth to remake Islam in their own image, and we have no strategy for combating these dawah efforts.

Besides, it wouldn’t cease, even if we could end our dependence on Saudi and Iraqi crude tomorrow. There would be other countries willing to take up the slack, especially China. In other words, Saudi Arabia would not be hard pressed to find another client. As a matter of fact, Gulf countries may be already exploiting China’s dependence on their oil, by convincing the Chinese government to permit members of their Muslim community to train at Gulf madrasas. Readers of this blog are informed enough to understand the possible long-term implications of Wahhabist training and dawah.

Also, if we were to pull our oil interests from the Gulf tomorrow, it would alter our geopolitical standing in the region. We would no longer be a strategic player in a significant region of the world. Far from retreating from the Gulf, I believe we should be meddling more: more diplomats, more soldiers, more military bases, more corporations, more tourists. 12 trillion surplus dollars converts to substantial global geopolitical power for countries that are no bigger than the state of Rhode Island. Instead of whining, we should be asserting our geopolitical muscle when it is needed.

Another argument often heard is the call for fuel alternatives. In very real terms alternative energy sources are still decades -- decades -- away. Are they worth pursuing? Yes. Will any provide an alternative to current energy prices? Absolutely not.

Case in point: the number of long haul trucks on the road is an important indicator of economic growth. More buying going on here in the States, means the more goods being manufactured overseas. When those new goods reach our shores at points like the port of Los Angeles, those products have to make it to the Wal-Mart or supermarket shelves, and more often than not they are getting their by truck. When there is an alternative fuel that can fuel an 18-wheeler from LA to Maine, then we have finally found an alternative source of energy. The same goes for planes. The alternative fuel we’re all looking for to solve our current problems just doesn’t exist.

For the record, I would love to see the end of our oil-based economy, but only if the alternative is clean and reliable and could fuel economic growth. The fact is we’re as close to an oil-free economy as we are to a paper-free bathroom. Yet that doesn’t mean our policy should be to have our public leaders gripe about the rising prices, and sit helplessly by while unstable countries play games with or lose total control over their crude supplies.

For example: Nigeria is a mess. How bad could it be for one of our top suppliers? Shell, the biggest company in country, has been in a near constant state of force majeure since the beginning of the year. That means they have been unable to meet their contracts due to circumstances way out of their control. Well, the entire country is spiraling out of control. Are we doing anything to support security and stability in Nigeria? Do we even have a Nigeria policy?

It’s not enough to say we need to end our “dependence” on foreign oil and find alternative fuels. Neither idea is realistic. Rather, we should be turning this volatile market into a strategic advantage. We’re not the only country hurting under the rising costs of crude, but we are the United States, the most productive country on earth, and the world’s only superpower. Countries all over the world have a stake in American economic stability, and we have a stake in seeing that oil markets work to our advantage.

May 07, 2008

Abe Greenwald at Contentions posted today news that Prince al Walid's money is targeting other key educational institutions for influence, this time in the UK.

England’s Cambridge University and Edinburgh University have accepted a £16 million endowment from Saudi Prince Al-Walid to create Islamic study centers that “aim to carry out research and public engagements designed to increase understanding between the Muslim world and the West.”

April 28, 2008

Barakat, a 45-year-old Syrian-born Spanish citizen who is currently serving a 12-year sentence for membership of a terrorist organisation, may stand trial again over alleged payments made while he was in prison in 2006 and 2007 that investigators claim went to finance terrorism.

Judge Moreno has charged Barakat and two alleged accomplices, Mohammed Ghaleb Kalaje and Bassam Dalati, with collaborating with a terrorist group for a second time.

The judge claims that the three used relatives to strip Kalaje's real estate firm of its assets, cashing 33 checks worth EUR 2.4 million over the course of two years.

Apparently prison does nothing to reform jihadis. Who knew?

There's this story from German news agency about three Turkish-born men accused of raising money for a charity "with an Islamic focus," whatever that means:

The Turkish-born men are alleged to have removed 18.6 million euros ($29.7 million) in cash from the bank accounts of German-registered association Deniz Feneri. Prosecutors said some of the cash was smuggled to Turkey.

The charity raised foreign-relief funds among well-off Turkish communities on a Deniz Feneri television program. The title means lighthouse. Advertisements on the Internet, in the press and on a Dutch-based television channel Euro 7 used images of suffering in Turkey, Pakistan and other nations, prosecutors said.

Police established that donations to Deniz Feneri from early 2002 until the end of April 2007, when an inquiry into the charity became public, had totaled 41 million euros.

And AKI reported last week on country-wide raids in Germany "as part of a probe into an alleged radical Islamist group believed to be recruiting militants for 'Jihad' abroad."

The raids were part of an investigation into nine citizens suspected of systematically trying to convert others to radical Islam and recruiting militants for Jihad overseas, according to German authorities quoted by Deutsche Welle Radio.

March 26, 2008

The first step in identifying and forestalling the flow of funds to terrorists is to understand the funding requirements of modern terrorist groups. The costs associated not only with conducting terrorist attacks but also with developing and maintaining a terrorist organisation and its ideology are significant. Funds are required to promote a militant ideology, pay operatives and their families, arrange for travel, train new members, forge documents, pay bribes, acquire weapons, and stage attacks. Often, a variety of higher-cost services, including propaganda and ostensibly legitimate social or charitable activities are needed to provide a veil of legitimacy for organisations that promote their objectives through terrorism.

The nature of funding for both operational and broader support activities will vary by the type of terrorist organisation, with traditional, hierarchical quasi-state-like terrorist organisations on one side of the spectrum and small, decentralised independently supported organisations on the other. At its extreme, this second category has involved small, ostensibly self-directed networks seeking to meet their own funding requirements through means that differ little from their everyday activity. Purchases – even when used to procure the precursors for attacks – are not conspicuous.

Terrorist financing requirements fall into two general areas: (1) funding specific terrorist operations, such as direct costs associated with specific operations and (2) broader organisational costs to develop and maintain an infrastructure of organisational support and to promote the ideology of a terrorist organisation.

According to Harold Garrison, the chief executive of HDG, his company alone has arranged for the investment of 4 billion Euros ($6.2 billion) for the accounts of wealthy individuals in the Middle East.

March 11, 2008

El Pais (via Expatica) reports on a recent International Monetary Fund report on money laundering activities in the key country of Liechtenstein:

The report, which states that the Alpine principality has been prime territory for money laundering activities, reads: "Liechtenstein conducted three investigations relating to terrorist financing. [In one], the proceedings were referred to the Spanish authorities. This investigation was triggered by a suspicious activity report filed by a Liechtenstein financial intermediary."

March 02, 2008

Investor's Business Daily recently editorialized on the uncertainties associated with the expanding behemoth that is Islamic financing:

While the $800 billion global Shariah market is relatively small, it's growing at a 15% clip, thanks to the oil boom and a resurgence in Islamic fundamentalism, according to the Center for Security Policy. And it's expected to more than double over the next 10 years

What's the fuss? Money is money, right? Not in this case.

Shariah-compliant finance involves investments and other transactions that have been structured to conform with the orthodox teachings of Islamic law.

That means they can't charge or earn interest — the cornerstone of our credit-driven economy. Nor can they take any stake in haram, or forbidden, industries, including meat and beverage producers (if they process any pork or alcohol); entertainment; gaming; and interest-based financing.

Wall Street is jumping into this hot new market oblivious to the risks not just to the bottom line, but to national security. It knows little about Shariah law and is turning to consultants to create "ethical" products to sell.

Lost in the hype over these Muslim-friendly funds is that they must "purify" their returns by transferring at least 3% into Islamic charities, many of which funnel funds to terrorists. So the Street may unwittingly be helping the evildoers launder blood money.

How clueless can cash hungry Western banking executives be? Ask one whether they've ever participated in a wa'ad swap. These are the kinds of murky transactions taking place, add billions more to the "basket" and you begin to see why shariah-compliant banking should be approached with caution.

The usual caveat applies here: I don't mind to idea of Islamic banking, and it's my hope that one day it can be a fair, transparent system that even a few khwaja could trust to have no mucky ties to terrorist entities. Unfortunately, that day hasn't arrived yet.

February 20, 2008

AKI reports that Bahrain will be the home of a new bouncing baby (sharia-compliant) bank:

The bank, to be called the First Energy Bank, has obtained 'in principle' approval from the Central Bank of Bahrain.

The new bank will focus on the investment, financing and service needs of the energy sector and follow the principles of Sharia law, it said in a statement on its website.

"A great opportunity comes from the significant demand that is projected for investment in the global energy sector over the next 25 years," said chairman and founder of the bank, Esam Janahi.

"First Energy Bank is a response to this imperative and we're proud to be associated with a Sharia'a banking concept that will be the very first to offer exclusively tailored investment, financing and service solutions to the energy industry."

Islamic law prevents the collection and payment of interest and prohibits investments that are considered to go against Islamic values.

The bank is the latest strategic initiative from the Bahrain-based Gulf Finance House, designed to capitalise on growing demand for investment in the global energy industry.

As I've noted numerous times on this blog, I don't see anything wrong with sharia-compliant banking, per se. However, in their current state there are vast opportunities for abuse of these systems. When you add to it the sheer amount of money we're talking about here, it's easy to see how Al Qaeda's future may be brighter than we think.

January 11, 2008

The founding of an Islamic bank with a $100 billion capital is about to materialize, the Chairman of the General Council of Islamic Banks and Financial Institutions (GCIBFI), Saleh Kamel said, adding that the $1 billion in founders’ capital is expected to be made available by the end of the first quarter of 2008.

The Bahraini Monetary Agency gave its preliminary approval for the establishment of the bank, which will focus on investment and not funding, the GCIBFI Chairman added.

So far many banks have invested in the new endeavor, such as al-Barakat Group with $100 million and the Kuwaiti Real Estate Bank with $20 million. The Saudi Investment Bank has expressed its desire to enter in the amount of $20 million. The Islamic Development Bank also expressed its interest to join, and there are potential investors from Bahrain and Malaysia, Kamel added.

$100 billion is just the beginning.

And what is our national and foreign policies for confronting or working with institutions like this?

Prosecutors said the men failed to disclose that Care was a successor to the Boston branch of the Al-Kifah Refugee Center in New York, which was linked to the 1993 World Trade Center bombing. The center was a recruitment office for Mektab al Khidmat, which Osama bin Laden co-founded in the 1980s to recruit mujahideen to fight the Soviets in Afghanistan, according to the 9-11 Commission.

What? You say you never heard of the case against three former officers of Care International? Suspected of helping support the development of Al Qaeda's early Afghan operations? Of course, you didn't hear about this case, because it had practically no coverage.

January 03, 2008

The six member states of the Gulf Cooperation Council, with accumulated surplus of $3 trillion, have in recent months been active in buying into large American, European and Asian firms. Experts estimate the funds invested by the six member states of GCC at $700 billion, of which $300 billion was invested in the US, and the remainder of that amount was invested in European and Asian countries

With so much liquidity generated by rising oil revenues and the enormous flow of cash through their financial centers, the Gulf countries are intensifying their efforts against money laundering.

Globally, money laundering is estimated at $5.1 trillion annually, half of it is generated by illicit drugs and the other half generated mainly by arms trade, prostitution and assorted crimes. governments are capable of monitoring between 40-50% of the money laundered.

October 24, 2007

Rachel Ehrenfeld and Alyssa Lappen recently co-authored a near-perfect summary of the historical scope and contemporary scale of the financial threat posed by radical Islamists' influence in global banking systems:

The [Islamic Development Bank] and other Islamic financial successes encouraged MB leaders to formalize al-Banna’s vision. In 1977 and 1982, they convened in Lugano, Switzerland to chart a master plan to co-opt Western economic foundations — capitalism and democracy — in a treatise entitled “Towards a Worldwide Strategy for Islamic Policy,” also known as the Project. MB spiritual leader Qaradawi wrote the explicit document, dated Dec. 1, 1982.

The 12-point strategy includes diktats to “establish the Islamic state and gradual, parallel work to control local power centers...using institutional work as means to this end.” This requires “special Islamic economic, social and other institutions,” and “the necessary economic institutions to provide financial support” to spread fundamentalist Islam.

Consequently, the IDB founded the AAOIFI in 1990. AAOIFI members include the Saudi Dallah Al-Baraka Group (DAG), al-Rajhi Banking & Investment Corporation, and Kuwait Finance House; each of its members were implicated in funding al Qaeda and other MB offspring according to Richard Clarke, former counterterrorism chief . The 18 AAOIFI members also include Iran and Sudan, both on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctions list; Iran is an U.S. State Department-designated terror sponsoring state, too. UAE banks wired half of the funding for the 9/11 attacks.